Google keyword ruling indicates evolving trademark jurisprudence in digital realm

A division bench of the Delhi High Court has issued a detailed and nuanced ruling on keywords in Google LLC v DRS Logistics (P) Ltd and Google India Private Limited v DRS Logistics (P) Ltd (2023 SCC Online Del 4809, 10 August 2023). The court's analysis focuses on:

• how Google's use of trademarks as keywords in its Ads programme aligns with the Trademarks Act 1999;
• whether such use constitutes trademark infringement; and
• if Google is entitled to the defence of an intermediary under the Information Technology Act 2000 on account of such use.

The decision lies at the intersection of IP law and the digital world.

Background

DRS Logistics, the respondents, alleged infringement of their registered trademark AGARWAL PACKERS AND MOVERS on the grounds that competitors’ use of the mark as keywords triggered Google Ads, which misled consumers and caused confusion. The judge concluded that invisible use as a keyword may constitute infringement but in certain circumstances  could also qualify as fair or bona fide use. Google appealed to a Division Bench. 

Decoding the decision 

The Division Bench considered several factors in its analysis.

Understanding trademark use

Section 2(2) of the Trademarks Act was interpreted to allow the word ‘use’ a wide amplitude on account of the following definition: “use in relation to goods shall be construed as a reference to the use of the mark upon, or in any physical or in any other relation whatsoever, to such goods” (emphasis added). Also, the court found that the use of a trademark as a keyword is trademark use in advertising and found this to be by both the advertiser and Google. This finding was supported by Google's active role in assisting advertisers in choosing suitable keywords.

Defining infringement

While third-party use of trademarks as keywords to trigger display of advertisements constitutes use in advertising, it does not inherently infringe unless the ad leads to confusion, unfair advantage, dilution or compromise of the mark in question. Thus, an infringement finding would depend on the specific facts of each case.

Consumer confusion

The court discussed consumer confusion and asserted that a complaint based on misuse of trademarks as keywords must offer proof of genuine consumer confusion caused by the displayed ad.

Fair use

Parallels were drawn between digital and physical markets, highlighting the fairness of presenting consumers with alternative choices, akin to placing competing products side by side in physical retail. The court stated that there is nothing illegal, if:

…an entity engaged in commerce puts its advertising billboard next to an exclusive store of its competitor. It is also permissible for a competitor to buy shelf space next to competing goods of a well-known brand.

Initial interest confusion doctrine 

The court distinguished between initial interest confusion and the doctrine of initial interest confusion, noting that the latter requires a real likelihood of confusion to return a finding of trademark infringement. To quote the Division Bench:

…sponsored links may be relevant to the search query and what the internet user is searching for. It may thus generate interest that would obviously not constitute infringement of a registered trademark…if there is no deception or confusion.

The test of average consumers with imperfect recollection to adjudge likelihood of confusion would not apply here in its rudimentary sense – the test is to be viewed from the perspective of a person who understands how search engines function. A typical user does not expect search query results to offer a clear answer; rather, they are well aware of the nuances of sponsored ads that outline choices and may in fact be looking for alternatives.

Google's role and legal immunity

The court ruled that Google plays an active role in promoting use of trademarks as keywords, monetises its keyword suggestion tool and is effectively engaged in selling such trademarks to advertisers in the form of keywords. This is why Google’s use of trademarks as keywords constitutes advertising under the Trademarks Act. Given its active involvement in suggesting trademarks as keywords, its claim to safe-harbour immunity (offered to intermediaries under Section 79(1) of the Information Technology Act) was compromised. Therefore, if there is infringement in a particular case, Google would not be entitled to the defence of an intermediary.

Looking ahead: progressive jurisprudence

This verdict's impact lies in assessing the overall effect of an ad using trademark keywords, rather than a per se infringement finding. The court's focus on user intent behind search queries and the role of search engines indicates a more progressive angle. The ruling reinforces competitive advertising within limits and highlights the evolving nature of trademark jurisprudence in the digital realm.